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A recipe for a nuclear power renaissanceâ¢
It's been 22 years since the accident at Three Mile Island near Harrisburg and 15 years since the melt-down at Chernobyl in Ukraine. But recent power and petroleum dilemmas are tilting public sentiment in nuclear's favor.
And Westinghouse Electric Co., long a leader in atomic energy systems, is prepped for a resurgence in nuclear. Today, the corporation primarily services and maintains nearly half of the world's nuclear plants. And it also has a state-of-the-art plant design (the AP600 nuclear reactor) licensed and ready to build - if only someone would order one.
'We haven't built a nuclear unit in this country in 20 years,' noted Charles 'Charlie' Pryor Jr., chief executive of Westinghouse, Monroeville, during a recent interview.
'So, as an industry, we really need to start planning, so we can get this right when we do finally get the chance to start building,' said Pryor, who has headed the company since early 1997.
Next month, it will be three years since Westinghouse agreed to be purchased by British Nuclear Fuels Ltd., a global supplier of nuclear fuel, products and services. Since that time, much has changed for Westinghouse, which still employs about 3,000 in this region.
On the downside is China. When BNFL took over Westinghouse, China was viewed as a $50 billion nuclear market. Then came the piracy of Los Alamos nuclear-arms secrets by Chinese operatives and the accidental U.S. bombing of China's embassy in Belgrade. Now, China leaders are mostly looking to its vast coal reserves for power plants, not nuclear.
But on the upside are three more-recent developments in this country:
'If the full potential of (Bush's) proposed changes are realized in the United States, BNFL will be well positioned to provide nuclear reactor technology and associated fuel, equipment and services through Westinghouse, with their recently licensed advanced reactor system,' said BNFL Chairman Hugh Collum in a recent statement.
A FINNISH START?
That 'advanced reactor' is the AP600. Conceived in 1985, the design of the small, simple, safe and super-efficient system was certified by the U.S. Nuclear Regulatory Commission in December 1999 after a six-year review.
Westinghouse and its research and development partners spent about $430 million to design it.
Smaller than conventional base-load plants, the AP600 would be ideal to supplement a plant's needs during periods of peak demand. The AP600 can generate 600 megawatts of power, versus an average 1,000 megawatts of a conventional, base-load plant. But so far, Westinghouse has yet to receive an order.
'Finland is looking at a nuclear power unit, and the AP600 is a candidate,' said Pryor. 'I wish I could tell you the AP600 was their first choice, but I just don't know.'
Another possible source of orders is Britain. It has 17 nuclear power plants, many of which need to be replaced, according to Pryor.
In addition, South Korea is ramping up its nuclear program. That includes standardizing on Westinghouse designs to build one nuclear unit annually for the next 15 years. The company should pick up significant revenue from supplying equipment, design support and engineering services, said Pryor.
In the meantime, Westinghouse drew more than 80 percent of its $1.7 billion in revenue (the fiscal year ended March 31) from existing nuclear plants. The company maintains, services, improves, upgrades and modernizes about 40 percent of the world's 438 nuclear power plants.
'If we started getting a barrage of orders for new plants, we definitely would have to restructure this company to bring talent back into estimating, project management and scheduling,' noted Pryor.
If current trends continue, Westinghouse might need a little reorganizing. In just the last 18 months, there has been a seismic shift in U.S. public opinion regarding nuclear power.
Only 42 percent of Americans favored building more nuclear plants in October 1999, according to a survey of 1,000 people which was sponsored by the Nuclear Energy Institute. The needle of public sentiment moved to 51 percent last January, and to 66 percent - or two-thirds in favor - by March.
(A recent Newsweek poll found 61 percent of Americans favor nuclear but did not indicate how that showing compared with past opinion.)
Another 87 percent favored renewal of nuclear energy plants' operating licenses, said the NEI-paid poll. Between now and 2004, 28 of the nation's 103 nuclear power plants are expected to apply for 20-year extensions on their licenses. Five of those plant owners were granted renewals this year.
'This could be the dawn of a whole new era in the nuclear industry,' said an effusive Melanie White, spokeswoman for Washington-based NEI.
COST AND CONTAINMENT
Not so fast. Westinghouse and the rest of the industry still must clear two high hurdles that have haunted nuclear power for years:
Forty-four years and 437 sites after the first nuclear power plant (in Shippingport, built by Westinghouse), the industry still has no approved plan to permanently dispose of spent nuclear fuel.
All 103 nuclear plant operators currently store the waste on site. But that method has physical and legal limits, said White.
'We have to go back to the drawing board,' she said. That leaves two alternatives, both of which are controversial.
Nuclear waste can be reprocessed. But that technology was abandoned in the 1970s over concerns about nuclear proliferation in an age of terrorism.
The other alternative is storing the nation's roughly 44,000 tons of radioactive material in the Yucca Mountains of Nevada (a state with no nuclear plants). Some 100 miles outside Las Vegas, the site is the only such repository being considered by the federal government.
Westinghouse parent BNFL is steeped in nuclear waste disposal, including construction of radioactive-tight canisters for transporting spent fuel. But technical solutions are not even the issue, said Pryor.
'The issue is the state of Nevada doesn't want to take spent nuclear fuel from all the nuclear sites around this country. And that's the bottom line,' he said.
'There will not be another round of nuclear construction until that issue is resolved,' Seven Fetter, managing director of Fitch Inc., testified at a Senate hearing on May 8.
The other hurdle is the comparative cost of a nuclear plant.
Nuclear stacks up well purely on operating costs, based on most-recent, 1999 data from the NEI. It cost $1.83 per kilowatt to operate a nuclear plant for one hour. That compared with $2.07 for coal, $3.18 for oil and $3.52 for natural gas.
But utilities owners must also figure in the depreciation expense on the cost to build the facility, which is where gas has a 'tremendous advantage' over nuclear, said Pryor. Including the up-front capital cost, building even the economical AP600 runs about $1,600 per kilowatt, said Pryor.
'Even that number is too high, unless gas went to $6 or $7,' he said. 'But gas isn't going to go up that much. And you can't believe how many gas turbines are going to come online in the next three years.'
